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Spreading the Wealth

April, 2001

The biggest wads of money won’t be found in the pockets of contractors involved in Sandwich Isles Communications Inc.’s $500 million, fiber-optic network. Instead, the real dollars will be generated from the network’s capability to deliver voice, data and video traffic at the speed of light. And if Sandwich Isles meets its timeline, as many as 20,000 Hawaiian Homestead dwellers in six major Hawaiian Islands will have high-speed connections in just five years.

The economic impact of this fiber-optic project is limitless: Cable television for tots, telemedicine conferences for the elderly, and Internet-based classes for teen-agers. Once the network is installed, Sandwich Isles plans to deliver affordable rates and services to its Native Hawaiian beneficiaries—while operating independently from existing telecom providers in the state.

What makes the future network especially lucrative is its open-access agreement that will allow outside companies to piggyback on Sandwich Isle’s infrastructure. The concept is at least three years away, but it goes like this: A company wants to expand its coverage on a Neighbor Island, so it leases conduits (pipes that house the fiber-optic, glass strands) from Sandwich Isles and installs its own fiber-optic connection. Financially, it’s more practical than digging another trench.

“We’re not going to block anybody from using our access,” says Harold C. Johnston, sales and marketing director for Sandwich Isles. “We will make that backbone available to anybody who wants to use it. And yes, we will charge for that service. It’ll be more cost-effective for them than to build their own.”

The open-access agreement will bring Sandwich Isles to the same table as local exchange carriers Verizon Wireless and Oceanic Communications. Right now, Oceanic provides circuits for Sandwich Isles clients in the Waimanalo area. But that may not be necessary once the proposed network is in place. Says Oceanic’s vice president and general manager Ed Murley: “They’re good customers, good partners. And by expanding competition to additional markets, more customers will get the price and service that results from having multiple carriers that compete for customer service.” It also will garner additional revenue for Sandwich Isles in the next five, 10, even 30 years.

But rewind back to the year 2001. Sandwich Isles officials today say they don’t want to talk specifics. They maintain their position as a rural telephone company that services approximately 700 subscribers in the Hawaiian Homelands. Their goal is not to be a telecom giant but to serve the underserved. “We have three priorities right now: build the network; create jobs, and lastly, generate profits, but that’s No. 3 out of our priorities,” says Gil Tam, Sandwich Isle’s vice president for administration and community affairs.

Already some organizations hope to hitchhike on Sandwich Isle’s high-speed highway. Take Akimeka LLC, a Web-based company that customizes healthcare solutions for Hawaii and the Pacific Rim. The company is only 5 years old but last year generated approximately $12 million. Vaughn Vasconcellos, president of Akimeka, projects about $10 million in revenues this year.

In addition to providing telemedicine services to the military, Akimeka assists patients from as far as western Micronesia. “We want to provide an application in the telemedicine area that’s going to ride on their network, to provide Web-based tools for the native Hawaiian healthcare system to utilize,” says Vasconcellos. “Our goal is to have native Hawaiians have better healthcare access.”

Having been raised on Hawaiian Homelands himself, Vasconcellos witnessed the healthcare problems indigenous to native Hawaiians. Telemedicine, he says, will boost the living conditions in the remotest of neighbor Islands. And if plans to ride on Sandwich Isle’s future network fall into place, a high-tech hub for Akimeka will have to be built.

Meanwhile, the University of Hawaii at Hilo has met with Sandwich Isles officials once to discuss a possible partnership in distance learning. The school also has upgraded its own infrastructure. Old analog equipment this year was replaced with digital, allowing for 10 interactive channels instead of a two-way system. “We’re connected to the Hawaii Interactive Television System, which is home-based at UH-Manoa, and the STAN/DELTA systems, which connects to most of the state hospitals and many Pacific Island nations via the PEACESAT satellite or T-1,” says Robert T. Okuda, UH-Hilo’s associate director for technology and distance learning. The program offers baccalaureate programs in computer and marine science on Maui, Oahu and Kauai. Approximately 81 students in Hawaii are enrolled.

The program easily could beam into Hawaiian Homestead homes. If proper grants and loans are secured, money won’t be an issue, university officials say. A fully loaded computer learning station can cost anywhere between $1,200 and $2,000. A videoconferencing system designed to host a group of students in one setting, retails for around $10,000. But who knows? Computer prices are plunging, and maybe these price tags won’t be the same in three to five years.

Meanwhile, while contractors work hard to link Hawaii to this $500 million, fiber-optic network, Sandwich Isles officials say they won’t be swayed by dollars, at least, not just yet. “We don’t want to be distracted,” Tam says.